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Providing social care services free at the point of use would save the NHS £4.5 billion a year and enable more elderly people to receive care in the community, according to a new report from a leading think tank.

A new report from IPPR think tank finds that free social care would spare millions of elderly people from spiralling costs associated with old age an an aging population.

Under IPPR’s proposal, older people who could afford to would still pay for their own accommodation costs but not for personal care, no matter where they receive it.

The proposal similar to the system already in place in Scotland, and would more than double the number of people receiving state-funded social care.

The report argues that the proposal would result in potential savings to the NHS of up to £4.5bn per year, with more older people receiving care in the community rather than blocking hospital beds.

It also argues that the change would create greater parity between cancer patients, whose care is all free from the NHS, and those with dementia, many of whom must pay for all their care.

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The change would increase the number of people with access to state-funded social care from 185,000 to 440,000, at a cost of £36bn to the treasury.

This would be substantially more than the £17bn the UK currently spends. However, the IPPR argues that £11 billion of the increase would arise even within the existing system because of the growing elderly population.

The change would also provide a wider boost for the UK economy, through the creation of 70,000 new full-time jobs in the care sector.

The report argues that free social care for the elderly should be funded from higher taxes, with a rise of two percentage points in income tax needed to meet the extra costs.

Spending on social care has plummeted by more than 10% over the last decade as a result of the squeeze on council budgets due to funding cuts by central government.

Harry Quilter-Pinner, Senior Research Fellow at IPPR and lead author of the report, said: “If you develop cancer in England you are cared for by the NHS, free at the point of need for as long as it takes, but if you develop dementia you’re likely to have to pay for all your own social care – running up potentially catastrophic costs in the last years of your life. This makes no sense.”

“By investing in personal social care so it is free at the point of need for everyone over 65, we can provide a better and more integrated care system, one that’s fairer to us all and saves the NHS £4.5 billion a year.”

Dean Hochlaf, IPPR Researcher and co-author of the report, said: “Over the next decade the number of older people in the UK is set to grow substantially.

“This will bring with it more people facing diseases of ageing such as dementia, as well as higher levels of frailty. We need a social care system that is fit for purpose.

“Adding a penny or two to tax is a small price to pay for creating a simpler, joined-up system in which we collectively contribute to the costs that many of us and our relatives will otherwise face.”

Sir David Behan, chair of Health Education England and former chief executive of the Care Quality Commission, said: “In 1948, politicians were brave in making the NHS free at the point of need and funded out of general taxation.

“We need our politicians today to be just as courageous and do the same for social care.

“After all, the hallmark of a civilised society is how well we treat the most vulnerable, including our elderly parents and grandparents. At the moment we are failing them but it doesn’t have to be that way.”